Permanent loss of auditory-nerve (AN) spiral ganglion neurons is a prevalent cochlear pathology in humans that does not impact clinical audiometric thresholds in quiet. Reduced sensory input to the auditory pathway could potentially degrade speech-perception abilities in affected individuals, but support for this hypothesis is unclear. The goal of the proposed study is to pinpoint aspects of auditory perception impacted by AN damage and characterize the physiological changes underlying perceptual impairment. Many natural signals, including speech, contain complex patterns of amplitude modulation (hereafter, ?modulation?) that are processed by modulation-tuned neurons in the central nervous system. Modulation tuning emerges in the midbrain due to inhibition, and can play a key processing role in noise by segregating competing sounds into discrete processing streams based on differences in modulation frequency. Building upon prior findings of diminished inhibitory signaling following AN injury, the proposed research will test the hypothesis that AN damage selectively impairs complex-signal perception in noise while sparing audiometric thresholds due to a deficit in neural modulation tuning. Behavioral and neurophysiological studies will be conducted in the budgerigar, an avian model species capable of mimicking speech. Strengths of the budgerigar model system include human- like behavioral performance on complex-listening tasks and midbrain processing mechanisms shared with mammals, including many neurons with prominent modulation tuning. Furthermore, selective AN damage can be induced in budgerigars using the glutamate analog kainic acid. New behavioral and neurophysiological experiments will investigate the impact of kainic-acid induced AN damage on auditory processing. Aim 1 will use operant-conditioning procedures in behaviorally trained animals to identify aspects of auditory perception impacted by AN damage. Preliminary data support our hypothesis that AN damage has no effect on audiometric thresholds in quiet yet can impair performance of tasks that rely on modulation tuning. Aim 2 will use extracellular midbrain recordings in awake animals to quantify effects of AN damage on neural inhibition, modulation tuning, and encoding of complex speech-like signals in competing noise. We hypothesize that AN damage will reduce the strength of modulation tuning due to diminished inhibition, and consequently degrade encoding of synthetic vowels and consonants in noise. Aim 3 will use single-fiber AN recordings to test the hypothesis that AN response properties in budgerigars are similar to those found in mammals and other avian species, with higher-threshold fibers lost following kainic-acid exposure. New physiological results will be used to refine a computational model of subcortical auditory processing. Completion of these aims will provide crucial insight into the impact of AN damage on auditory perception of simple and complex sounds and the changes in neural processing associated with perceptual impairment. Understanding these effects is an essential step toward developing an informed public health strategy to treat this common cochlear pathology.